Fed Governor Waller Believes in the Potential of Crypto Tech

Christopher Waller, a member of the United States Federal Reserve Board of Governors, noted in a conference audience on February 10 that the components that make up the bitcoin ecosystem are not all equal and serve different purposes.

The Global Interdependence Center welcomed Waller at its event on “Digital Money, Decentralized Finance, and the Puzzle of Crypto.” Waller took into account blockchain technology, cryptocurrency assets, and trade technologies like smart contracts and tokenization individually.

He concentrated on the more extensive uses of cryptography. The use of distributed ledger technology to solve “a wide range of data management problems” is currently the subject of research.

Waller stated that “while these technological developments are still in their infancy, they have potential applications beyond the crypto ecosystem that could lead to substantial productivity enhancements in other industries.”

He added that having a comprehensive understanding of how the various components of the crypto ecosystem differ will make it easier to assure that regulation will lessen the risks associated with crypto assets without inhibiting innovation of “the positive features of the crypto ecosystem.”

Waller on CBDCs

However, talking about central bank digital currency, Waller stated that the main question for him is what is a flaw in the present US payment scheme that only a CBDC can solve. He claimed that this query has not yet received a response. Waller has already stated his skepticism regarding a digital currency issued by the US central bank. 

He claimed that bitcoin has no intrinsic value and compared it to a commodity to explain how things with no intrinsic value could still be traded for a profit due to “the social contrivance of money.” 

Waller stated: 

“I haven’t been a big fan of CBDC.” 

Last month, the Fed rejected Wyoming-based crypto bank Custodial Bank’s application to join the Fed’s system because the financial institution was unable to submit a regulated and consistent application that was in accordance with the necessary criteria.